The Canadian dollar weakened past C$1.06 per U.S. dollar for the first time since October 2011 as the country lost jobs in June, adding to speculation the Bank of Canada may end its leaning toward raising interest rates.
The currency fell to the lowest level since October 2011 against its U.S. counterpart as Canada lost 400 jobs in June after adding 95,000 the month before, Statistics Canada reported today. A Bloomberg economist survey had called for the country to lose 7,500 jobs. The jobless rate was unchanged at 7.1. The U.S. created 195,000 jobs in June, exceeding the 165,000 called for in a Bloomberg survey. The Bank of Canada, which has included language warning of rate increases in policy statements for more than a year, will make its next rate decision July 17.
“It would likely contribute to the market’s possible expectations that the tacit hawkish bias the Bank of Canada now could be guided more dovishly,” Jack Spitz, Toronto-based managing director of foreign exchange at National Bank of Canada, said before the report. “The reaction would be one of disappointment from a monetary policy perspective in Canada.”
The loonie, as the Canadian dollar is known, fell 0.9 percent to C$1.0607 per U.S. dollar at 8:37 a.m. in Toronto. One loonie buys 94.28 U.S. cents.